A premium is the amount customers pay for
their insurance. What you pay will vary
on
your personal circumstances.
Where Do Premiums Go?
Once premiums are collected by us, what does the amount go towards?
The following shows the main areas, based on specific data we have looked at (see below).
Claims
Naturally, you'd expect one of the largest parts of the premium collected are used to help payout claims. Claims are an important part of what we do to help protect what matters to you.
Government Taxes & Charges
A part of the premium goes towards government taxes and charges. After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy is then applied.
Reinsurance
A part of the premium collected goes towards paying our insurance premium to reinsurance providers. We purchase additional cover of reinsurance to protect against the exposure to large scale events such as storms, floods and cyclones. This helps us maintain our ability to payout claims.
Profit
Like any business, we need to make a profit to ensure we can continue running our business year after year. Our profit can vary significantly from year to year depending on whether there were large scale events like storms, floods and cyclones.
Expenses
Every business has operating costs that enable them to continue their operations and service their customers. That's why a percentage of the insurance premium goes towards the operating cost of running our business. We also invest in the technologies and products that would improve the services we provide to you.
What data did we use?
The chart above is based on data aggregated across all AAI Motor Policies and is calculated based on the period from 1 July 2018 to 30 June 2020. The data may vary from time to time, depending on the measurement period.
AAI Motor Policies mean comprehensive, fire, theft and third party property damage, third party property damage, motorcycle, caravan and motor home policies of all the AAI Brands, issued by AAI Limited and includes policies with all types of optional covers. It does not include boat insurance or motor cover sold under a business policy.
AAI Brands mean AAMI, GIO, Suncorp, Apia, Shannons, Bingle Insurance, CIL Insurance, Vero, InsureMyRide, Just Car Insurance and Essentials by AAI.
Percentages are rounded to the nearest whole number.
This information is intended to be of a general nature and for information purposes only. ‘Where do premiums go’ may differ and may change from time to time. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it - please make your own enquiries.
What Impacts Premium?
The below general information is relevant to Shannons motor insurance products - including car insurance (including comprehensive; third party legal liability cover), motorcycle insurance (including comprehensive; third party legal liability cover) and collectable caravan insurance (comprehensive only), unless otherwise stated. The information below is not relevant for compulsory third party insurance. Please refer to your relevant policy documents for more detail.
Many factors can impact the amount of premium that we charge our customers, some key matters are set out below. In addition to change in circumstances impacting your cover, premiums are also impacted by changes in our pricing practice, pricing factors and how we calculate premiums from time to time.
Agreed Value (only applicable to some covers: not applicable to third party legal liability cover)
The agreed value your vehicle is insured for affects your premium. For example, luxury cars can have higher premiums as they cost more to replace as opposed to a less expensive car in the event of a total loss.
Type of Vehicle
The type of vehicle you have has a significant impact on your premium. This is because the cost of replacement parts vary depending on the make and model of vehicle you have.
Address Where the Vehicle is Kept Overnight
The place where your vehicle is kept can impact your premium. Generally, a higher population density in an area means more traffic and therefore, a higher chance of an incident occurring. Certain areas with higher risk of theft, vandalism and other similar incidents will also affect the premium.
Driver Age
A driver's age and experience can affect the likelihood of having an accident or claim. Generally, more experienced drivers have fewer accidents.
Claims
A premium may change depending on the total amount of claims we receive each year across all policies. If we receive more claims than expected, premiums can be impacted.
Government Taxes & Charges
After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy is then applied. Government taxes and charges may change from time to time.
How Can I Review My Premium?
The below general information is relevant to Shannons motor insurance products - including car insurance (including comprehensive; third party legal liability cover), motorcycle insurance (including comprehensive; third party legal liability cover) and collectable caravan insurance (comprehensive only), unless otherwise stated. The information below is not relevant for compulsory third party insurance. Please refer to your relevant policy documents for more detail.
Review your policies to make sure all details are correct. Some changes can impact your premium if they affect the premium factors. Below are some ways you can influence how much premium you pay under our suite of Shannons motor products where relevant. When reviewing your policy, you should always consider your own personal circumstances and check whether your policy suits your own needs.
Multi Vehicle Discount
Shannons offers premium discounts, where two or more vehicles are insured on the same policy.
Discounts are also a factor that can affect your premium. Any discounts are usually calculated and applied before the application of government taxes and charges.
You should check your relevant policy documentation for information on discounts.
Occasionally special discounts or promotions are offered in our marketing campaigns. If we do this, separate terms and conditions may apply.
If you are eligible for more than one discount, we usually apply any subsequent discount to the already discounted premium. The amount and type of discounts offered can change or be withdrawn.
Discounts do not apply to Shannons NSW CTP Green Slip Insurance policies.
Our policies may be subject to minimum premiums.
To make changes to your policy, log in online to your account or give us a call on 13 46 46.
Flexible Excess
You may be able to choose a 'Flexible Excess' that applies in addition to your 'Basic Excess' to reduce your premium.
Limited Use Cover
If you don't drive your car regularly, special premium rates may be available.
This information is intended to be of a general nature and for information purposes only. What your premium goes towards may differ and may change from time to time. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it - please make your own enquiries.
The information provided is accurate and true as of 7th September 2020, noting we may change our pricing practice (and the premium factors) from time to time.
Shannons Pty Limited ABN 91 099 692 636 (Shannons) is an authorised representative of AAI Limited ABN 48 005 297 807 (AAI Limited), the issuer Shannons home and contents insurance. Consider the relevant Product Disclosure Statement before making a decision about this insurance. This advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.
Compulsory Third Party (CTP) Personal Injury Insurance is issued by AAI Limited trading as GIO (GIO). Shannons acts as an agent and authorised representative of GIO.
Various products and services are provided by different entities of the Suncorp group. The different entities of the Suncorp group are not responsible for, or liable in respect of, products or services provided by other entities of the Suncorp group.